The new tariff measures announced by US President Donald Trump mark a significant rupture in the institutional framework and operational logic of global free trade. 

With newly imposed import duties of 34 percent on China, 46 percent on Vietnam, 26 percent on India, and the like, the return of protectionism has emerged as a defining feature of contemporary trade policy. 

Notably, Türkiye has been subjected only to the baseline rate of 10 percent, a differentiation that warrants analytical scrutiny from both geopolitical and economic perspectives.

 The Trump administration’s branding of these measures under the banner of ‘Liberation Day’ is not merely symbolic—it reflects a deeper effort to re-centre the discourse of economic sovereignty. 

With the US goods trade deficit surpassing $1.2 trillion in 2024, the new tariff policy is justified on the grounds of protecting the domestic industry in the world’s biggest economy. 

However, such unilateral tariff policies directly conflict with the World Trade Organization’s (WTO) fundamental principles of the trading system,  particularly its principles of non-discrimination, predictability and freer trade.

A shift of this magnitude is expected to trigger substantial realignments in global value chains. Disruptions in production hubs, changes in cost structures, and a rise in consumer prices may collectively dampen global economic growth in the medium to long term.

Türkiye’s position: Limited impact, relative advantage

The 10% tariff rate applied to Turkish exports is comparatively moderate. While Türkiye has traditionally had a deficit in its trade with the US, in 2021 and beyond, trade relations have become more balanced and have reached a structure where Türkiye has had modest surpluses in some years.

With China and other Asian countries, which have large trade deficits with the US are going to face steep tariff barriers, the new era will support Türkiye’s capacity to remain competitive due to its ability to offer timely deliveries, regulatory compliance, and flexible manufacturing.

The possible decreases in commodity prices due to Trump's high tariffs may have additional benefits for Türkiye. 

In addition, it may even be possible for production that has migrated from Türkiye to the countries currently on the high tariffs list to return in the medium term due to Türkiye's relative tariff advantage.

Systemic risks and indirect effects

Despite the relatively favourable rate, Türkiye cannot overlook the systemic risks. After all, the 10 percent tariff still represents an additional cost burden for Turkish exporters, especially in low-margin sectors. 

Moreover, a 20 per cent tariff on the European Union—Türkiye’s largest trading partner—may indirectly reduce external demand for Turkish intermediate and final goods. This is a possible side effect of Trump’s tariffs on Türkiye’s exports.

Another concern—perhaps the most significant one—is the fluid and politically contingent nature of Trump’s trade policies. 

Higher uncertainty in the trade environment due to tariff changes hinders long-term investment planning and strategic positioning, especially for emerging economies like Türkiye.

To navigate this new trade environment successfully, Türkiye may adopt a multi-dimensional strategy:

Sectoral incentives and support: Policymakers should design targeted support mechanisms for sectors with significant export potential to the US, including infrastructure for faster logistics and easier access to trade finance.

Market and product diversification: To compensate for possible adverse effects on trade with the US, Türkiye should increase its efforts to connect with new markets in regions such as Africa, Latin America, and Central Asia while also shifting towards higher-value-added products.

Enhanced trade diplomacy: Turkish diplomatic and trade representatives in Washington DC should proactively lobby for exemptions or preferential treatment within the existing tariff framework.

Relocation of production: Firms facing competitive disadvantages in high-tariff countries might consider partial or full relocation of final assembly or packaging or even relocation of early production phases to the US or countries with lower tariffs. Policies should be developed to ensure that Türkiye gets its fair share of such a change.

In a nutshell, the new US tariff regime signals not only a shift in trade policy but also a broader challenge to the multilateral order of global commerce. For Türkiye, this transformation presents both opportunities and structural risks.

To capitalise on the former while mitigating the latter, Türkiye must go beyond reactive trade policy and move toward a comprehensive realignment of its production base, institutional capacity, and international positioning. 

If Türkiye manages to take the necessary steps and precautions, it can weather the current protectionist storm and emerge as a more competitive and resilient player in global trade.